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International Baccalaureate
Diploma Programme Subject Brief
Individuals and societies:
Economics—higher level
First assessments 2022—last assessments 2029
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The course is presented as six academic areas enclosing a central core. Students study
two modern languages (or a modern language and a classical language), a ­humanities
or social science subject, an experimental science, mathematics and one of the creative
arts. Instead of an arts subject, students can choose two subjects from another area.
It is this comprehensive range of subjects that makes the Diploma Programme a
demanding course of study designed to prepare students effectively for university
entrance. In each of the academic areas students have flexibility in making their
choices, which means they can choose subjects that particularly interest them and
that they may wish to study further at university.
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The Diploma Programme (DP) is a rigorous pre-university course of study designed for students in the 16 to 19 age
range. It is a broad-based two-year course that aims to encourage students to be knowledgeable and
inquiring, but also caring and compassionate. There is a strong emphasis on encouraging students
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to develop intercultural understanding, open-mindedness, and the attitudes necessary for
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them to respect and evaluate a range of points of view.
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Normally, three subjects (and not more than four) are taken at higher level (HL), and
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the others are taken at standard level (SL). The IB recommends 240 teaching hours for HL
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subjects and 150 hours for SL. Subjects at HL are studied in greater depth and breadth than
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at SL. In addition, three core elements—the extended essay, theory of knowledge and creativity,
activity, service—are compulsory and central to the philosophy of the programme.
These DP subject briefs illustrate four key course components.
I. Course description and aims
II. Curriculum model overview
III. Assessment model
IV. Sample questions
I. Course description and aims
II. Curriculum model overview
Economics is an exciting, dynamic subject that allows students to develop
an understanding of the complexities and interdependence of economic
activities in a rapidly changing world. At the heart of economic theory is
the problem of scarcity. Owing to scarcity, choices have to be made. The
economics course, at both SL and HL, uses economic theories, models and
key concepts to examine the ways in which these choices are made: at the
level of producers and consumers in individual markets (microeconomics); at
the level of the government and the national economy (macroeconomics);
and at an international level, where countries are becoming increasingly
interdependent (the global economy). The DP economics course allows
students to explore these models, theories and key concepts, and apply
them, using empirical data, through the examination of six real-world
issues. Through their own inquiry, students will be able to appreciate both
the values and limitations of economic models in explaining real-world
economic behaviour and outcomes. By focusing on the six real-world issues
through the nine key concepts (scarcity, choice, efficiency, equity, economic
well-being, sustainability, change, interdependence and intervention),
students of the economics course will develop the knowledge, skills, values
and attitudes that will encourage them to act responsibly as global citizens.
The aims of the DP economics course are to enable students to:
z develop a critical understanding of a range of economic theories, models,
ideas and tools in the areas of microeconomics, macroeconomics and
the global economy
z apply economic theories, models, ideas and tools, and analyse economic
data to understand and engage with real-world economic issues and
problems facing individuals and societies
z develop a conceptual understanding of individuals’ and societies’
economic choices, interactions, challenges and consequences of
economic decision-making.
Component
Recommended
teaching hours
Unit 1: Introduction to economics
1.1 What is economics?
1.2 How do economists approach the world?
10
Unit
2.1
2.2
2.3
2.4
70
Unit 3: Macroeconomics
3.1 Measuring economic activity and
illustrating its variations
3.2 Variations in economic activity—
aggregate demand and aggregate supply
3.3 Macroeconomic objectives
3.4 Economics of inequality and poverty
3.5 Demand management (demand-side
policies)—monetary policy
3.6 Demand management—fiscal policy
3.7 Supply-side policies
75
2: Microeconomics
Demand
Supply
Competitive market equilibrium
Critique of the maximizing behaviour of
consumers and producers
2.5 Elasticity of demand
2.6 Elasticity of supply
2.7 Role of government in microeconomics
2.8 Market failure—externalities and common
pool or common access resources
2.9 Market failure—public goods
2.10 Market failure—asymmetric information
2.11 Market failure—market power
2.12 The market’s inability to achieve equity
© International Baccalaureate Organization 2020
International Baccalaureate® | Baccalauréat International® | Bachillerato Internacional®
Unit 4: The global economy
4.1 Benefits of international trade
4.2 Types of trade protection
4.3 Arguments for and against trade control/
protection
4.4 Economic integration
4.5 Exchange rates
4.6 Balance of payments
4.7 Sustainable development
4.8 Measuring development
4.9 Barriers to economic growth and/or
economic development
4.10 Economic growth and/or economic
development strategies
65
Internal assessment
Portfolio of three commentaries
20
Type of
Format of
assessment assessment
External
Time
Weighting
of final
grade (%)
4 hours
45 mins
80
Paper 1
Extended response paper based
on all units of the syllabus
1 hour
15 mins
20
Paper 2
Data response paper based on
all units of the syllabus
1 hour
45 mins
30
Paper 3
Policy paper based on all units
of the syllabus
1 hour
45 mins
30
Three commentaries based on
different units of the syllabus
(except the introductory unit)
and from published extracts
from the news media, analysed
using different key concepts
20 hours
20
Internal
III. Assessment model
There are four assessment objectives for the DP economics course.
Having followed the course at HL, students will be expected to meet
the following objectives.
Assessment objective 1: Knowledge and understanding
z Demonstrate knowledge and understanding of specified content
z Demonstrate knowledge and understanding of the common
SL/HL syllabus
z Demonstrate knowledge and understanding of current economic
issues and data
z Demonstrate knowledge and understanding of the HL extension
topics
Assessment objective 2: Application and analysis
z Apply economic concepts and theories to real-world situations
z Identify and interpret economic data
z Analyse how economic information is used effectively in particular
contexts
z In the internal assessment task: Explain the link between key
economic concepts and economic commentaries
z Demonstrate application and analysis of the HL extension topics
Assessment objective 3: Synthesis and evaluation
z Examine economic concepts and theories
z Use economic concepts and examples to construct and present
an argument
z Discuss and evaluate economic information and theories
z Demonstrate economic synthesis and evaluation of the HL
extension topics
z Select and use economic data using economic theory to make
policy recommendations
Assessment objective 4: Use and application of appropriate skills
z Produce well-structured written material, using appropriate
economic theory, concepts and terminology
z Produce and use diagrams to help explain economic theory,
concepts and real-world issues
z Select, interpret and analyse appropriate extracts from the news
media
z Interpret appropriate data sets
z Use quantitative techniques to identify, explain and analyse
economic relationships
Portfolio
IV. Sample questions
Paper 1
z Explain two tools open to a central bank to conduct expansionary
monetary policy.
z Using real-world examples, evaluate the effectiveness of monetary
policy to achieve low unemployment.
Paper 2
z Using an exchange rate diagram, explain how the increase in
the interest rate by the Nigerian central bank might prevent the
continued fall in the value of the naira.
Paper 3
z Using the data provided, and your knowledge of economics, recommend a policy that could be introduced by the government of
Country X in response to the expected fall in the world price of coffee.
About the IB: For over 50 years, the IB has built a reputation for high-quality, challenging programmes of education that develop internationally
minded young people who are well prepared for the challenges of life in the 21st century and are able to contribute to creating a better, more
peaceful world.
For further information on the IB Diploma Programme, visit: www.ibo.org/en/dp.
Complete subject guides can be accessed through the programme resource centre or purchased through the IB store: store.ibo.org.
For more on how the DP prepares students for success at university, visit: www.ibo.org/en/university-admission.